This new bureaucracy is the result of the massive financial overhaul bill passed by the Democrats and signed by President Obama.
Few, if any, of those politicians who voted for the bill read the bill. They just have faith in the goodness of massive government intervention.
How much good will the new bureau do?
The Los Angeles Times interviewed its leader, Elizabeth Warren, who has not been confirmed by the U.S. Senate.
Would this bureau have prevented our housing crisis and its flood of foreclosures?
That is hard to believe as the much more regulated markets of Europe were similarly slammed and disrupted every bit as much as the more free market American economy.
Warren says yes: If this agency had been in place a decade ago, the subprime mortgages that were sold to families across the country and that ultimately cost so many of them their homes would never have been marketed. Without those subprime mortgages fed into the system, the housing bubble would not have inflated with such speed, and an asset securitization market would not have … grown to such gargantuan proportions, built on a fundamentally unstable base.
We might still have had a housing bubble, but it would have been modest and most families would have survived without significant disruption. Too-big-to-fail would not have entered the lexicon, at least not through home mortgages.